State Drops Bid For Agency Receiver

Focus Now On Unfair Trade Practice Lawsuit Against Adoption Service

MIDDLETOWN — Superior Court Judge Richard Stanley is no longer being asked to change his mind on appointing a permanent receiver for a beleaguered city adoption agency.

The state has dropped its efforts to get Stanley to reverse his May ruling, which turned Adoption Services of Connecticut Inc. back over to its executive director, Kenneth Keller. Instead, lawyers with the attorney general's office are focusing on a pending unfair trade practices lawsuit against the agency.

``At this point in time, we've decided not to expend any further resources on the receiver issue,'' said Bill Halldin, a spokesman for the attorney general's office. ``We will continue to pursue the overall case. How quickly that's going to move is anybody's guess.''

Ralph Crozier, the Seymour-based attorney for Adoption Services, said he is pleased the state ``is not wasting any more money beating a dead horse'' over the receivership issue.

Crozier made it clear that he thinks the state is also wasting money pursuing his client in court with the unfair trade practices lawsuit.

``The state of Connecticut is paying lots and lots of people lots and lots of money,'' Crozier said. ``I figure they've spent about $150,000 on this.''

The state's lawsuit alleges Adoption Services suffers from serious financial and management problems. The agency, state officials claim, has deceived some families seeking to adopt, refused refunds to others and favored wealthier clients.

Based on these allegations, the state persuaded the court to appoint a temporary receiver for the agency in March.

Stanley rejected the request for a permanent receiver, and relieved the temporary receiver of control over the agency, because he said the state had not proved that the agency was insolvent or violated state regulations to the degree a receivership was required.

A receivership typically involves the appointment by the court of a presumably neutral and knowledgeable person to administer an agency that has come under suspicion of mismanagement or fraud.

Stanley issued his ruling before a team of assistant attorneys general had finished presenting the state's case. The state returned to the judge's courtroom in August, asking to reopen the hearing so more witnesses could be called to back the state's allegations.

Stanley never made a decision on the request.

Crozier said he is confident the agency will win if the unfair trade practices lawsuit comes to trial.

``I will not be on the defensive, I will be on the offensive,'' said Crozier, whose highly theatrical appearances before Stanley last spring drew criticism from the state's team of lawyers as well as the judge.

Crozier insists the unprecedented state takeover of the agency has led to the near-ruin of Adoption Services. He says a long-anticipated request to the court for permission to sue the temporary receiver is nearly ready for delivery.

The temporary receiver, Honey Pivirotto of Cheshire, is accused by the agency's lawyers of acting fraudulently in violation of her fiduciary duties. Pivirotto had submitted a report to the court claiming Adoption Services was insolvent and recommending its liquidation.

Edward Giacci, Crozier's law partner, told Stanley in August that cash reserves were drained, staff dispersed and potential clients sent elsewhere during the weeks the temporary receiver was in charge.

Crozier said the state needs to restore the agency to the financial position it had before a temporary receiver was appointed.

The lawyer claimed the state offered a settlement that would drop the unfair trade practices lawsuit if the agency agreed not to pursue legal action. But Crozier said the state balked at paying Adoption Services the $30,000 he said is needed to restore the agency to its pre-receivership state.